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Justice Minister Shane Rattenbury said a new needle exchange proposal would be developed and put to staff within a year.

The announcement ended a two-year impasse on a pay deal for jail employees, after negotiations stalled due to a clause related to the proposed needle exchange program.

The Alexander Maconochie Centre's enterprise bargaining agreement can now be finalised, unlocking back pay of up to $7000 for each of the 180 staff.

But drug-user organisations expressed their disappointment that staff would decide government policy.

"It is unacceptable that staff without specialist expertise in BBV prevention are expected under the deed of agreement to take responsibility for policy decisions about serious diseases that can lead to long-term health problems and even death," Sione Crawford, of the Canberra Alliance for Harm Minimisation and Advocacy, said.

Mr Crawford urged both the government and Community and Public Sector Union to negotiate in good faith to ensure both the health and safety of prison staff and duty of care to prisoners.

He said it would be critical that prisoner health and workplace health and safety were not seen as incompatible.

"Indeed evidence from NSPs in prisons in other countries show no adverse health or staff safety outcomes associated with such programs," Mr Crawford said.

Australian Injecting and Illicit Drug Users League executive officer Annie Madden said AMC inmates already had access to needles and syringes.

But the crudely crafted injecting equipment – often made using biros or cotton buds – were often shared among up to 30 inmates, she said.

"A controlled NSP would be safer for all," she said.

Ms Madden said it was important to remember the point of the discussion was to prevent the spread of blood-borne viruses.

In the ACT alone, it is estimated that up to 65 per cent of prisoners have hepatitis C, including at least nine prisoners who have contracted it within the AMC since it opened.

"Governments across Australia have an obligation to proactively address the high risk of blood-borne virus transmission, particularly hepatitis C in our prisons," Ms Madden said.

"In announcing the Deed of Agreement between the ACT government and ACTCS staff to outline a process for progressing discussions on the proposed NSP in the ACT prison, the ACT government is openly acknowledging their statutory responsibility for the health and wellbeing of prisoners in the ACT."